Aram RostonInvestigative producerJust as the State Department is trying to work its way clear of its Blackwater troubles, a scathing federal audit released Tuesday exposes a glaring lapse in oversight of another federal contractor in Iraq, DynCorp. DynCorp was supposed to train and equip Iraqi police, but the report says the State Department doesn’t know how most of the money in the billion-plus-dollar program was spent.

The State Department "does not know specifically what it received for most of the $1.2 billion in expenditures under its DynCorp contract for the Iraqi Police Training Program," the audit says. The federal watchdogs, with the Special Inspector General for Iraq Reconstruction, or SIGIR, said that they even had to suspend their audit because there wasn't enough data to check the books, which were in “disarray.”Read More at MSNBC

Dynacorp not new to controversy:Alleged Human Rights Violations and Fraud

The company is not short on controversy. Under the Plan Colombia contract, the company has 88 aircraft and 307 employees - 139 of them American - flying missions to eradicate coca fields in Colombia. Soldier of Fortune magazine once ran a cover story on DynCorp, proclaiming it "Colombia's Coke-Bustin' Broncos."

US Rep. Janice Schakowsky, an Illinois Democrat, told Wired magazine that hiring a private company to fly what amounts to combat missions is asking for trouble. DynCorp's employees have a history of behaving like cowboys," Schakowsky noted.

"Is the US military privatizing its missions to avoid public controversy or to avoid embarrassment - to hide body bags from the media and shield the military from public opinion?" she asked.

Indeed a group of Ecuadoran peasants filed a class action against the company in September 2001. The suit alleges that herbicides spread by DynCorp in Colombia were drifting across the border, withering legitimate crops, causing human and livestock illness, and, in several cases, killing children. Assistant Secretary of State Rand Beers intervened in the case right away telling the judge the lawsuit posed "a grave risk to US national security and foreign policy objectives."One of the contractors chosen with DynCorp to provide litigation support to DOJ was CACI, the leading provider of Geographic Information Systems to the federal government. Richard Armitage, a high-ranking official at Defense during the Reagan Administration and at the State Department during the Bush II Administration, was a consultant and member of CACI’s board from 1999 to 2001.

After DynCorp personnel were later the subject of several lawsuits related to pedophilia and sex slave trafficking in partnership with local mafia in Eastern Europe,[17] Armitage as a senior official at the U.S. State Department would write a letter in support of large new sole source contracts to DynCorp based on the theory that a company should not lose contracts as a result of the conduct of a few employees.

In short, sex slave trafficking and pedophilia in its ranks did not prevent DynCorp from winning significant new contracts, including a $500 million sole-source contract to run police, enforcement, courts and prisons in Iraq.